The market risk premium:
A) Varies over time as both the risk-free rate of return and the market rate of return vary.
B) Plus the risk-free rate of return equals the cost of capital for any firm with a beta of zero.
C) Is equal to one % for a risk-free asset.
D) Is equal to the risk-free rate of return multiplied by the beta of a firm.
E) Is modified by the standard deviation when computing the cost of equity.
Correct Answer:
Verified
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